People on Sheares Bridge in front of the two durians bidding farewell to LKY. It was a very wet day.

4/29/2010

An interesting affordable table

New HDB flats still affordable mah! And this is the table provided by Mah Bow Tan.
2 rm $100k Median household income $1,380
3 rm $162k Median household income $2,100
4 rm $263k Median household income $4,100
5 rm $338k Median household income $5,300
Below is the price and income level in 1974 of mine.
3 rm $18k Median household income $1,500
4 rm $22k Median household income $1,800
5 rm $27.5k Median household income $2,500
Of course Mah Bow Tan is right. The flats in 1974 and the flats today are all affordable. It is how much one is paying and getting in return. Money getting smaller or quality of housing improving? The flats that the people are getting are worth every cent they paid for it, then and today. Are the life of the people getting better? Swiss standard of living in price?
Is this what is meant by being better off? Maybe it is not fair to use 1974 statistics. Let’s be honest, even 1984 or 1994 statistics are not fair. We should use something more recent, like 1995 or 1996, to be relevant. I can project that in the future a $10,000 household income would probably afford only a 2 rm flat. And I will call it affordable still. As for today, a $2,500 household income could only afford a 3 rm flat while a $2,500 income could afford a 5 rm flat in the past.
So please do not disagree with Mah Bow Tan that the flats are now unaffordable. He is absolutely right. The flats today are affordable and will be affordable even in the future. Maybe then for the same money one will get a dog’s kennel and pay in 100 years.

7 comments:

I am no statistician or am very educated but just to give you a comparison. Forty five years ago, when I bought my first second hand car, it costs me $800. Today, if I buy a decent one, it may cost me $60,000. That's a whopping 75 times increase. Similarly, I bought my 3 room HDB 45 years ago for $6.2 K. Now, have to pay $162K. That's only a 26 times increase.

So my conclusion?

HDB flats are indeed still affordable when compared to cars, the other love of Singaporeans.

The flats now may be smaller but they come with more fixtures and features. And not forgetting most are BTO and D.& B. to specifications and with an environment almost similar to condos.

I only an untalented layman. So I look at statistics to see what it tells.

The talented will use statistics differently. They can take a position then get the talented to arrange a set of statistics to support that position. They call it cooking the numbers. And I guarantee you the statistics will prove that the position is statistically correct.

But one day another talented may cook up some statistics to prove that position thoroughly nonsensical, and statistically untenable.

Yah loh, in the mid seventies, my family was resettled and i got a 4 Room Unit at Bedok South for 18.5K. It was over 900 sg ft, practically and simply designed. No Built to Order, no Designed and Built or whatever beautiful terms.Wet market was(is) walking distance away, sports complex and swimming pools nearby with many schools around the vicinity.

My spouse and i had a combined income of about $1.5K then which rose to about over $2K within the next few years. Like to say that other than the simple home, my family did not own any car, colour tv and was even without telephone till the late eighties. This means we led very simple living with two kids, i did own a scooter(2nd hand) and an old bicycle for transportations.

We went for maximun loan which was 20 years at the longest and interest was fixed at slightly over 2%. Then in the 1980s, we upgraded to a 5Rm Unit(139 sq metre) and it costs less than a $100K with fixed interest rate of near 3% if memory serves me right.

Me does not feel any happier that i could sell the present unit for over $400K. On the contrary, i am disgusted with the high prices of present day HDB Housings. Me could only afford a simple living although my home was purchase at a reasonable cost. Me simply dare not imagine new owners with average household income of $3K and below with the HDB pricings now.

What about increasing conservancy charges, rising property tax and relentless hikes in utilities and everything else?

Mr Bean,I think you forgot about inflation. $2.5K in 1974 is worth far more than $2.5K now. Anyway, I had heard that the building cost for a 5 rm HDB flat based on tender building contract is only $50K per unit. Is it true?

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